taxes are deflationary in economic terms,paying down debt when the rate is low is always the best option its very hard to pay it down when rates are higher,
Its this compulsive notion of paying down the debt that is peculiar. The sentiment seems to be pay down debt now while the economy is growing (meaning further pressure on public services and continuing high taxes on incomes - so who is benefiting in that type of economy?).
When economies grow, living standards should improve, otherwise what is the point?
we have massive economic growth and are still borrowing for day to day expenditur
We aren't. The current expenditure account is running at a surplus of €5.5bn. The overall budget deficit is on account of capital expenditure programs amounting to €7bn. This is critical for the sustainability of a growing economy that needs new roads, schools, houses, hospitals etc.
The small deficit is less than growth rate of the economy and the capital spend should ensure we can cope with increasing demands on capacity (if spent effectively).
We could have decided to pay down the debt by using the current account surplus of €5.5bn to the detriment of capital spending, but what would that do? It would reduce the national debt by what? 2.5%, saving €120m in interest payments?
In the meantime, vital infrastructure requirements are suspended, economic activity starts to slow, unemployment increases, future revenues begin to fall, the dysfunction in the housing market gets worse, etc...etc...The government gets voted out and a new administration goes on a spending splurge to kick start the economy borrowing amounts at higher interest rates than they could have got had they not deflated the economy.
The critical thing in all of this is that the rate of borrowing is less than the growth rate of the economy, which it is.